(a)[5]
Prepare a single table showing how the cash flow changes in each of Years 0 to 5 as a result of buying the machine.
(b)[2]
Calculate the machine’s payback period.
(c)[3]
State three reasons why payback can be a useful investment appraisal method.
(d)[3]
Calculate the Net Present Value (NPV) for buying the machine.
(e)[4]
Calculate the Internal Rate of Return (IRR) of the machine to three decimal places.
(f)[4]
Recommend, with reasons, which machine Tisha ought to buy.
(g)[4]
Discuss which factors, apart from those you considered in (f), Tisha should take into account when deciding.